• US stock market daily report (June 11, 2015, Thursday)

    There's a new game in town and its called flipping zombie foreclosures. New data out shows that, with rising house prices and increased strength in the housing market, banks are moving troubled homes through the foreclosure process in an attempt to take advantage of higher prices.

    According to RealtyTrac, at the end of Q2, there were nearly 127,000 zombie foreclosures - making up about one in five foreclosed properties - down 10% from same time during 2014.

    Daren Blomquist, vice president at RealtyTrac said, “Banks realize that because of this seller’s market, they can get top dollar, even for the scratch-and-dent properties that foreclosures represent. That gives them more motivation to push through even some of the tough foreclosure cases that had lingered in the process longer.”

    Over the past year, the number of zombie foreclosures has risen in half of the 183 metro areas of major cities such as some of the highest-priced markets such as Boston, Houston, Los Angeles and New York. During that time, in the LA metro area, zombie foreclosures surged by 39% to nearly 1,900 at the end of Q2. In the Houston metro area zombie foreclosures jumped by 38% to 442.

    One in every 1,040 foreclosed home was owner-vacated at the end of the Q2, per the national zombie-foreclosure rate. In Atlantic City, New Jersey where casinos are struggling and one in every 130 homes is a zombie foreclosure, there is a relatively large number of troubled properties. Trenton, N.J. has one in 166 homes as a zombie foreclosure. Tampa, Fl has a zombie foreclosure rate of one in 218.

    Blomquist said, “The longer the foreclosure process drags on, the more likely the homeowner will end up leaving. In some of these cities you have underlying economic difficulty as well, which makes it more likely a homeowner will fall into a foreclosure in the first place, and that they may leave for greener pastures.”

    A zombie foreclosure is a vacant house still in the foreclosure process. Most zombie homes are in disrepair after the owner departed, some occupied by squatters or drug dealers. Empty homes frequently turn into eyesores and post a negative impact on neighborhood property values.

    Contributed by Millennium Traders
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